Home > Chemial News > Paint & Coating News > The price increase letter is freshly released and it will increase by 9,000 at a time! Some raw materials are now "diving" at a high level, dropping 2000 a week!

The price increase letter is freshly released and it will increase by 9,000 at a time! Some raw materials are now "diving" at a high level, dropping 2000 a week!

Echemi 2021-04-29

Raw material prices are "rising" everywhere, and the price increase letter in May has begun to bloom everywhere! The continuous surge in price increases has seriously threatened the survival of some manufacturers, and downstream companies have complained one after another.

Under the high price and low inventory, the downstream is facing a dilemma. They dare not buy, let alone "sell"! Part of the skyrocketing raw materials finally showed a downward trend due to non-receiving downstream. However, some analysts said that this wave of decline may be for a better rise!

Dilemma for mid- and downstream companies!
Near the end of April, some commodities entered the bull market pattern! At the close of the 27th, the leading commodity "Dr. Copper" surged over 3%, reaching a maximum of 72,820 yuan/ton, a new high since September 2011!

The raw materials are rising wildly, and the raw material manufacturing industry is also making a lot of money. According to statistics, from January to February, the profit of the raw material manufacturing industry increased by 3.46 times year-on-year, an average increase of 46.4% over the two years. The profit rate of enterprises in related industries has increased significantly. Among them, the petroleum, coal and other fuel processing industries turned losses into profits, with an additional profit of 57.70 billion yuan; the profit of the chemical raw materials and chemical products manufacturing industry increased by 4.98 times year-on-year.

On the other hand, in the middle and lower reaches, due to the hindrance of the price increase of downstream products, downstream enterprises “dare not take orders” and traders are afraid to stock up.

A relevant person in charge of a plastics manufacturer in East China said that in the first quarter of this year, although the company repeatedly raised prices, it still lost more than 1 million yuan. On the one hand, the price increase of products is far behind the increase of raw material prices. On the other hand, considering the customers, I dare not increase the price too much at one time.

At present, downstream companies have become numb to the price increase of raw materials. I don't know whether the subsequent price will continue to rise or the high level will be adjusted. This is a dilemma.

On the one hand, the prices of raw materials continue to rise, and everyone is bearish on forward prices and are afraid to buy in the spot market; on the other hand, external demand is strong, the spot is outflowing, and the market is characterized by low inventory, and everyone is afraid to sell hedging in the futures market.

Therefore, under the pattern of low inventory and long-term discounts, downstream enterprises are in a dilemma. They dare not buy or "sell"!
Another wave of price increase letters has been released!
One wave has not settled, another wave has risen. The price increase in March and April has not yet been digested. The price increase in May has been freshly released, and there is a trend of blooming everywhere!

Formosa Plastics Corporation of the United States issued a letter stating that it will increase the price of its PP products from May 1st by 5 cents/lb, equivalent to approximately RMB 715/ton.

He also stated that the price increase will be carried out in addition to the monomer price changes, and orders for all products will depend on the supply capacity of the facility under normal operation.

Leonlon announced on April 26 that due to the recent tight supply of raw materials, rising costs and rising related expenses, in order to stabilize product quality and supply, and provide better services, the company researched and decided: antioxidants and light stabilizers The price of series products is increased by 20%, and the price increase will take effect immediately under the conditions permitted by the contract.

Nova Chemical said that due to mechanical failure, all its PE resins produced in Sarnia, Ontario, Canada have encountered force majeure. Taking into account the maintenance time and current inventory levels, production will be discontinued from April 27, 2021.

Teijin Co., Ltd. announced on the 23rd that although it had announced some product increases on March 1, due to the soaring cost of bisphenol A, the prices of some accessories such as PC/ABS and ABS resins continued to soar and the ocean freight costs continued to rise. The price of PC is adjusted upwards, and the price increase will take effect on May 1st:
PANLITE® (PC-based resin) will be raised by USD 1.5/kg (equivalent to RMB 9728.9/ton);
MULTILON® (PC-based alloy resin) will be raised by USD 1.5/kg (equivalent to RMB 9728.9/ton);

On April 24, Nanya Electronic Materials (Huizhou) Co., Ltd. issued a price increase notice. The notice stated that due to the continuous increase in raw material copper and resin prices, and the supply of copper foil has been in short supply, the supply is tight, and the processing fee has also continued to rise. The previous price adjustments cannot be fully reflected. As costs increase, sales prices still need to be adjusted again to ease cost pressures. The proposed adjustment range is as follows: substrate increase by 5%-8%; PP increase by 5%. Shipments will take effect from May 1, 2021.
Fell! Soaring raw material prices "diving"!
Although futures new highs and price increase letters continue to impact the market, some raw materials that have skyrocketed for three months finally have a callback momentum!


▶▶Epoxy resin: Decrease 2000 yuan/ton within a week!
On the 27th, the talks on liquid epoxy resins in East China went down, with an offer of 38,500-39,000 yuan/ton, which fell below the 40,000 yuan/ton mark, and a decrease of 2,000 yuan/ton within the week, a decrease of 5.19%.

The main price reduction factor is that downstream customers are bearish. A solid resin company stated that the current price of epoxy resin is close to the "ceiling", and downstream companies resist high prices and are preparing to replace epoxy resin products with pure polyester products. At present, resin shipments have decreased, and prices have also fallen. According to industry analysts, the price is expected to fall by another 10,000 yuan/ton.


▶Styrene: It has risen and fallen, and it has fallen by more than 500 yuan/ton in three days!
With the end of the short-filling transaction at the end of the month, styrene fluctuated and declined. The East China market now offered a price of 10,000 yuan/ton on the 27th, a drop of more than 500 yuan/ton from the 25th.

Styrene squeezed the short-term inflation and caused strong downstream resistance. GPPS suffered serious losses, EPS suffered a small loss, and some downstream companies reduced production and sold raw materials. Coupled with the postponement of maintenance plans for some domestic and South Korean devices in May, and Huatai and Sinochem Hongrun plan to start production, the remote market supply is relatively loose. Styrene prices are expected to fall in the short term.


▶Butadiene: A weekly drop of 11.59%!
On the 27th, butadiene was quoted at 6623.33 yuan/ton, down 868.34 yuan/ton in a week, or 11.59%.

The domestic butadiene market is dominated by wait-and-see, and the downstream inquiries are not high. Before the holiday, some downstreams just need to cover up their positions, which will support the butadiene market; but the short-term domestic spot supply is still relatively abundant, and the downstream rubber industry chain market and inventory are under pressure, which will suppress the butadiene market to a certain extent. The performance of the olefin market is relatively stalemate.

▶Bisphenol A: It fell by 1176.67 yuan/ton in a week!
On the 27th, bisphenol A was quoted at 28,640 yuan/ton, down 1176.67 yuan/ton in a week, or 3.95%.

Last week, the domestic bisphenol A market sentiment continued to decline. Prior to this, the price of bisphenol A rose to 30,000 yuan/ton, which triggered strong resistance in the downstream, especially in the PC industry. After that, the center of gravity of the bisphenol A market peaked and then fell.

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